We all know that the big three in detroit have been asking congress to back some loans for them.  Now we find out that the bill congress is discussing includes much more for the automakers than previously thought.

“We are still hearing back from (automakers). But $25 billion was in our energy bill last year,” Pelosi told reporters at a briefing today. “We certainly will have it in something, whether it is a stimulus, a supplemental, a (continuing resolution). It is very essential to the industry, and it goes in the right direction of new technologies. And so there is great support for it. What vehicle it is in just is a question of what will pass and what will be signed by the President.”

The automakers are thankful for the loan from last years energy bill, but they argue that it is too restrictive, they can not spend the money on things that they need to.

Right now the big 3 in Michigan have poor credit ratings, this means that if they try to borrow money through a conventional loan they’ll be paying double digit interest.  Federal backing of another loan would mean that they get to use the governments interest rates of around 4 to 5 percent, saving the automakers 100 million dollars per every one billion borrowed.

Automakers believe they have a limited window to make their case, because of Michigan’s importance in the presidential election as a swing state. Both presidential candidates John McCain and Barack Obama have endorsed the program. Obama backs the $50 billion that automakers are seeking, while McCain backs $25 billion.

Separately, the ranking member and chairman of the Senate Finace Committee, Sens. Charles Grassley, R-Iowa, and Max Baucus, D-Mont., introduced a wide-ranging $40 billion energy tax bill Thursday that would reduce tax breaks for oil companies but also provide incentives for renewable energy.

The bill includes tax credits of up to $7,500 per plug-in electric vehicle, a move that GM says is essential to helping defray the cost of new vehicles like the rechargeable Volt, due out in November of 2010.

Source: DetroitNews

GM gets their wish if that bill passes.  They were hoping to get the overall price of the Volt to $30 thousand, and right now it’s looking like the price will reach $35-37 thousand because they have to redesign a lot of the components to use less electricity.  The $7,500 in tax credits bring the price back down to earth.